ORAN - Vodafone Earnings Preview: Progress In Restructuring But Germany Remains Key

2024-05-12 02:59:02 ET

Summary

• The Vodafone Group has a new CEO since last year and has disposed of its Spanish activities as part of the restructuring.
• The company is also involved in talks for the disposal of its Italian unit, and investing in a capital-light fashion.
• VOD stock has lost over 50% of its value in the past five years, offers an enticing dividend yield of 11.6%, but is still not a buy given the risks.
• In this case, it is important to focus on its German operations and look for progress during the forthcoming financial results for FY'24.
• Its merger with Three UK could now be a step closer to materializing after the government provided conditional security clearance.

Since I last covered the Vodafone Group (VOD) in April 2022, a lot has changed with Nick Read being replaced as the CEO by Margherita Della Valle, previously the CFO. Also, as part of a restructuring exercise to simplify operations, it has closed a deal for the sale of its Spanish operations to Zegona Communications for around €5 billion , is involved in advanced talks with Swisscom (SCMWY) for the disposal of its Italian unit for €8 billion , without forgetting the monetization of tower assets with Vantage Towers AG (TWRF)....

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